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Two years ago we submitted our opinion on the 2007 amendment bill because we felt that the prevailing copyright ordinance and the proposed amendment were extremely biased to wealthy intellectual property owners and professional litigators who preyed on frivolous and malicious legal claim. Because of the practice of the biased copyright law and the rampant activities of frivolous or unethical litigators, we were forced to adopted the most “defensive mode of operation” including suspending more than 95% of our retailing business, some input/output services, and the overwhelming use of disclaimer. Ordinary people, most probably including the government officials may think that the disclaimer preceding this proposal looks rather odd or ridiculous. To be honest, we are in fact demonstrating an inevitable procedure in the course of our  operation taken as a resigned defensive measure for the protection of us against frivolous claim from malicious and unethical litigators.  We have reasons to believe that the culture of disclaimer is exactly a consequence of some sort of "intellectual corruption" manifested by the abuse of law and legal procedure  intended for legal extortion of which more and more are related to copyright or intellectual property.

After two years since the last amendment to the copyright ordinance, though the web 2.0, which featured by spontaneous response and interaction among peers on the net has been further consolidated as the common standard of internet in the mean time, we saw little improvement in the philosophy behind the new consultation paper released in 2009. Furthermore, from the presentation of the guest speakers in a seminar held by the “Internet Society Hong Kong (ISOC HK)” ¹,  we felt that the view of government officials and law drafters were still overshadowed by the influence of the wealthy tycoons of conventional content provider whose mindset remained unchanged in the rapid changing environment triggered by the digital revolution of communication technology, leading to an imbalanced  legal framework biased to wealthy copyright holders while ignoring the appeal of users, traders, network providers and even primary creators. Being a trader, service provider and primary creator, we genuinely respect copyright but must express to you and all people that the prevailing copyright ordinance does not benefit us and so will be the proposed amendment. Certainly it is infringing the interest of general public.

2. Fundamental Concepts Re-examined

2.1. Public Interest Vs Private Interest: 

The title of the bill itself tells that the law draftsman tended to give higher priority to the interest of copyright owners than the general public. If our society protects the minority interest because we denounce the tyranny of majority, for what reason we recognize the exception of tyranny of minority in dealing with copyright? This is inconsistent to the philosophy as always stated by the government who admits that public interest is the major concern in the process of policy making. If public interest is ranked prior to the minority interest, instead, it is more appropriate to change the title of the bill into something like "seeking to promote the public interest in the digital environment whilst maintain proper protection for copyright as an incentive to creation and invention" or "seeking a reasonable balance between the public interest and the interest of copyright owners in the digital environment". As a matter of fact, wealthy copyright owners are the hardliners and backbone of the advocates demanding for strictest copyright protection while the vulnerable class and their sympathizer are on the opposite side, thus making the copyright  protection nothing more than another exhibit of the tyranny of wealthy minority over the ordinary majority. We must ask what convince us to embrace a technological progress if it will not benefit but even harm the general public.

2.2  Public Space Vs Private Space:

In physical world, it seems that it is easy to draw a line that divides the private space and public space. However, on the internet, public space and private space are not well defined. Hardliners of copyright protection tend to see it a public space as a whole where all activities should be scrutinized and regulated like the public space in the physical world. We deny the proposition because we think that the “cyber space” is the natural extension of the physical space of human world which means that private zone should also be admitted. If our society punishes an internet user for shareing a digital file with his peer on the other side of the internet, in accordance with the same logic,  a reader will be punished if he shares a newspaper with his colleagues in the office, thus messing  up the private and public space we formerly admit in the physical world. The fear is not merely a groundless conjecture  but a real instance in the real world.  A per user levy scheme was once considered for the licensed use of a server operation system. Thinking about the huge number of spontaneous internet users logging in the server, any people will see the absurdity of the pricing policy. Probably because of the strong resentment of users and the practical problem in enforcing the licensing scheme, it has  never been the common practice for pricing the software. However, various restrictions are imposed on the transfer of ownership so as to confine the purchaser's right (the right to resell and dispose) to the purchased software. Obviously, the demand for stricter legal sanction is indeed a skillful shift  of the immense enforcement cost of an unjust pricing policy from the vendors themselves to the government or the society as a whole. 

2.3. Protection Of Copyright Vs Protection Of Income:  

With no doubt many people think that the protection of copyright is practically the protection of income of the copyright owners. Nevertheless, whether a piece of copyrighted work can be productive of income depends on a lot of factors  but not just the cost of production. All people should respect copyright but it does not mean that the society should guarantee the income of copyright owners. The lobbyers for stricter copyright control try to equate these two concepts and turn it into an institution. Being a humble member of creative industry, we fully understand the misery situation of artists on account of the attitude of most people towards creative service. For instance, up to now, many people, including the government purchasers,  still think that graphic design is and should be a free service to be provided early in bidding for a job or together with printing service.  Who care how much it costs for the provision of the service or stuff especially when free and legal stuff are really available in the real world? 

Furthermore, not all the intellectual properties bear a market value which are in fact determined by the demand for them. The calculation of damages based on the total volume of "illegal"(i.e. Unauthorized) copy or download is misleading. Firstly, the said quantity cannot be taken as the actual effective demand at the intended retail price in the light that the marginal cost for download is almost zero. There may be no valid demand at a price higher than the download cost ². An illustration of the rationale may be found in the levy /royalty (a few to ten thousands dollars per month per premises) imposed on the retail shops for playing background music/songs in their premises. Most of the shops we know simply cut the budget for buying CD titles and adhere to the saying of "silence is gold", hence resulting in a downfall of the sales volume which manifests  a very elastic demand in response to the fee scheme. Secondly, it is hard to say if the distribution is harming or benefiting the copyright owner or not. Surely we understand the saying is controversial and ethically incorrect supposing that the distribution is against the will of the copyright owner. However, if the copyright owner is willing to pay the mass media a huge advertising fee for propagandizing the promotion trailer, the issue is just a matter of a shift of mind (or a "paradigm shift" in sociology jargon) from the traditional promotional channel to the new channel. To resolve or reconcile the conflict, to our best knowledge, many foreign artists start to earn their income from live performance and other activities that  are unable to be substituted by downloadable files while releasing the recording of their work freely on the internet. Some prominent computer firms like IBM,  HP and Oracle offer their clients with freeware but rely on their services for the generation of income. We choose to internalize the cost by spreading it into the spending of R&D or promotion.

2.4. Protection Of  Copyright Vs Limitation  Of  Circulation:

Again people lobbying for stricter copyright control seem to confuse the protection of copyright with the limitation of circulation. From years' experience and observation, we realize that copyright work may be provided free of charges for many reasons. Some creators, represented by the founders and their followers of GNU GPL licence ³ and Creative Commons licence ⁴, who see knowledge as public property, value not the money income but the joy of sharing and the freedom of attaining knowledge. In another case, some artists as mentioned in 2.3 may rather let their work be distributed freely in order to increase their public exposure.

2.5. Coincidence Vs Plagiarism:

Almost all the hardliners of copyright protection avoid discussing the  possibility of “coincidence of similarity”. In reality, there are numerous cases disapproving the hypothesis. Long time ago in the history when continents are isolated by geographical barriers, similar theories were developed by scholars living in separate localities simultaneously. Pythagorean Theorem was discovered by ancient Greek and Chinese mathematicians in almost the same era. The invention of calculus was claimed by both Newton and Leibniz simultaneously. Except scientific findings, artistic creation cannot be free from the controversy over the determination of originator and copycat. Many famous musicians or song writers had gotten into endless quarrels or lawsuits with each other on “plagiarism”. We have heard that musicians have an old saying, "Adam and Eve wrote the first song and everyone has ripped them off ever since." Perhaps only people who are either extremely arrogant or naive dare to claim that their idea is unique among seven billion people in the world.

The prevailing institution, however, awards as well as rewards the wealthy class or game player who knows the rule of game well which in the end gives rise to a new profession of copyright litigation. On the top of the profession is a group of knowledgeable people who deliberately registered some vague or premature ideas with the authorities for patents, then awaiting for the emergence of target prey who launches materialized products or services using similar ideas after doing a lot of research and development. On the middle level are frivolous litigators who take advantages of the complicated litigation procedure and expensive litigation cost to blackmail their target preys. On the lowest level are rascal who simply extort their victims by making false accusation with false evidence or statement. The most cynical cases can be easily found in western countries in which many renowned corporations that maintain very high profile in fighting intellectual piracy in Hong Kong and developing countries have been convicted guilty of copyright infringement in the court rooms or pleaded for off-the-court-room settlement. Should we interpret the scenario as hypocrisy or  indeterminability of intellectual property?

If these “giants of intellectual property” fail to comply with the copyright law for mixed reasons, how can the owner of a small firm be able to know the legality of every job or every piece of items he is dealing in. In a case, we still could not be sure if a torch offered by a manufacturer would be free from allegation of "infringement" to any patented design or not after having spent a whole working day to cross-examine all the records on the web site of Intellectual Property Department. we deny that our ignorance or stupidity should account for our scepticism. Frankly speaking, the overwhelming legal claims based on allegation of plagiarism made by professional lawyers have confused our common sense of imitation. Most of the cases could have only been explained by the  abuse of the defect of our judicial system. We have reasons to believe that many of the cases have been ended up with settlement in favour of the frivolous and unethical litigators off the court room. So long as the legal system is still inclined to accept plagiarism rather than coincidence in case of similarity and fails to incorporate a mechanism to deter frivolous litigators from abusing the legal procedure, mediation is not a cure for the lawsuit abuse but may be even worse. By referring to the current "payment into court" system which is a litigation fee allocation arrangement for penalizing tough or stubborn litigators unanimously regardless of the jurisdiction, including the victims of false accusation or frivolous litigation, we envisage the danger arising from the misleading message of mediation as a solution to lawsuit abuse.   

2.6. Public Property Vs Private Property:

The concept of copyright was created for awarding the contributors who make contribution to enrich the intellectual heritage of human society but reserved an enormous room for all other people to further enrich and develop the existing civilization.⁵  To our best understanding, copyright was originally designed for the protection of a distinctive means for  accomplishing a certain ends or a special pattern of expression for delivering a certain message. It did not prevent other people from achieving the same goal with other competing approaches.⁶ Moreover, unlike physical commodities or inalienable (non-rival) services, knowledge, in economic sense, once published, is by default a public good attainable to all people.7 Thus on one extreme some people insist that knowledge should be regarded as public property free for all people due to its very nature of public good while on the other extreme some people try to turn it into private property from which all the derived benefit is to be appropriated by the owner only. We tend to accept the former view with some reservation for three reasons.


Surely we do not deny that we have reservation about the above three norms. Our reservation is rooted in the practical payback problem of research and development cost for some technologies like pharmacy which accrues a very high research and development cost in terms of time, effort and money but the details of result must be disclosed to the public for some sorts of reason such as public safety, and/or the test cost being significant yet production too simple and easy to be copied. Hence we accept exceptions for some knowledge as public property. Patent, a legal arrangement for rewarding the owner who intended to grab money with the registered invention in a finite period of time by coercively enforcing the restriction of unauthorized (or unpaid) use of the knowledge, was originally an attempt to maintain a balance between the conflicted interest of individuals and general public. Nevertheless, patent is too powerful in the light that it not only restricts the specific means of achieving ends but may also bans all other purposely activities conducted via alternative approaches. Its  adverse effect on competition is more significant than common copyright protection. Being a small firm, we hope that the standard of criteria for granting patent remain strict especially in dealing with the copyright of digital products or technologies which are featured by extremely short life cycle so that healthy competition will not be hindered.
 
2.7. Trade Protectionism Vs Copyright Protection: 

Perhaps people demanding for stricter copyright protection have never blamed parallel import for copyright infringement but they are surely the anchorman insisting restriction of  parallel import. We cannot understand how a group of social elite can suppress the dissident view of anti-globalization with high sounding free trade theory on the one hand but advocate restriction on the parallel import especially for multimedia products on the other hand. They are indeed adopting double standard over the behaviour of multinational enterprise chief and individual consumer. If the wealthy tycoons can choose the lowest cost manufacturer in various countries to produce their products based on the beautiful theory of “Logistics” or “Global Supply Chain”, it is equally reasonable for any consumer to choose the best priced products  regardless of the country of origin. Restriction is by nature a trade barrier intended for market segregation for capturing consumer surplus irrelevant to copyright protection.   

2.8. Presumption Of Permission Vs Presumption Of Forbiddence:

Perhaps the most far-reaching adverse effect of the recent copyright protection strengthening movement initiated mainly by the tycoons of traditional media and content providers on our society is the destruction of the fundamental belief of our civic life. For a very long time the western countries has kept praising the superiority of their culture of freedom and rule of common law which adopts innocence presumption ⁹. A citizen may do anything if it is not forbidden by law. Our social leaders also proudly declare that our judicial system is built on the same ground and repeatedly promise to us the same beautiful world. However, the ever increasing strict copyright authorization validation requirements  have casted an absolute uncertainty over the behaviour of every entity in our society. Nobody can be sure if his action is permitted or not. As mentioned in previous section, if the "giants of copyright" who always blame the underdeveloped countries for piracy of intellectual property are even convicted guilty of copyright infringement under the jurisdiction of their judicial system, how can a humble trader or individual consumer possess the necessary knowledge and resources to verify whether a merchandise or service complies with the copyright law? Can our law makers, law professionals or law enforcing department chiefs tell us how to conduct a reliable "prior art search" ¹⁰ which can certainly free people from the terror of being accused of copyright infringement for either the coincidence of similarity or indeed frivolous claim from malicious and illicit litigators? Can they teach all people how to comprehend the details of licence written in esoteric legal jargon and verify the validity of the authorization of billions of paid or unpaid stuff either in digital or physical format available to the public so as to free all people from the fear of committing the offence of violation of the EULA (End User Licence Agreement) unintentionally? In the light that we never be sure who else in the world possessing similar ideas has claimed or will claim proprietary right formally prior to other people,  the determination of the ownership of intangible concepts can never be so clear and certain as physical goods, and the proof for the permission is practically beyond the capacity of ordinary people under the "reinforced copyright ordinance", the presumption of forbiddence will inevitably replace  presumption of permission in dealing with copyrighted materials as a self-defensive measure". In other words, all traders are assumed to be guilty except they have "perfect" information about the “prior art” as well as the proof of the authorization from the de facto ultimate owner. For the peace of mind, we simply suspend most of the retail business. Should we say that the copyright ordinance is successful in the protection of copyright or just a destruction of mutual trust of our society?

2.9. Free Culture Vs Permission Culture:

We frankly think that the manner of our law makers towards all the above mentioned contrary concepts has been biased to the wealthy copyrighted content providers in the last few decades  under the influence and pressure of the tycoons of these giants of copyright. The restriction to the fair use of intellectual property has been intensified at a faster pace especially when centre of physical production was shifting from the west to the east. As copyright is an artificial attribute of knowledge endowed by human beings, the expansion of the right preclude more people from using the knowledge regardless of their mentality. Some privileged minority may monopolize the knowledge and capture huge wealth by granting permission for the use of knowledge which they nominally owned but is not necessarily created by them. Free culture ¹¹ which recognizes freedom of thinking as a natural human right is under the challenge of this permission culture¹² established on the ground of unrestrained expansion of copyright. The proposal for building a  “central hub”  for the central regulation or filtration (censorship?) of all information passing through is a highly dangerous and selfish idea which is again an action seeking for the short term benefit of minority at the sacrifice of the long term benefit of the general public.   Needless to point out the minimal feasibility arising from the technical and financial problem of recruiting immense computing power for "filtering” (censoring) the immense data throughput, the political correctiveness behind the idea is controversial for its very nature deemed to be hazardous to free culture by common sense.

3. Defficiency Of The Prevailing Legal Framework And The Proposed Amendment:

In addition to the biased manner towards the aforesaid contrary views, the prevailing legal framework and the proposed amendment lack the following provisions for qualifying it a good law. 
 
3.1. Lack Of The Provision Against Frivolous Lawsuit, Abuse Of Litigation And Illegal Collection Of Evidence Like Phishing, Enticement, And False Evidence:

The problem of lawsuit abuse has long been a consequence of the institutional defect of our legal framework. Our social elites have never admitted the problem. They  always rely on the self-discipline of the law profession and claim that no evidence to prove the existence of  abuse while ignoring the fact that many of the cases are settled off the court room without a trace in the record for the immense litigation cost. Even worse is that the high legal charges was misinterpreted as a shortage  of lawyers which has ended up with a rapid increase of the enrollment of law school. In turn the increasing supply stimulates the growth of abuse of litigations as described by the famousSay's Law ¹³ in Economics which states that “supply creates its demand”. Then copyright protection has become one of the most convenient reasons among all for triggering a frivolous legal claim. Without prejudice to anybody, if the authority and law makers are willing to hear the voice of victims of legal blackmail, we are willing to present to them our experience and knowledge in details about how copyright owners, law professionals and private investigators can form a dream ally of perfect fraud without fear of facing any sanction by means of lawsuit abuse in case any one party of them is deceptive.

3.2 Lack Of Critical And Independent Thinking:

To our best knowledge, all the official illustrations of the current ordinance and proposed amendment only embrace the views of the wealthy tycoons of content providers without any critical and independent thinking. Paid permission (i.e. permission upon payment from user) granted by copyright owner seems to be the only way or the default form recognized by our government to acknowledge copyright. While the money incentive to the creation is emphasized, the subtle negative effect of the presumed forbiddence on the economy and the enormous social cost accrued for enforcing the protection of the overvalued copyrighted materials based on this assumption are ignored. The overstated loss of copyright infringement has never been queried.  The merits, feasibility, potential and contribution to the society of free intellectual property either in public domain or released under free licence like GPL or Creative Commons are not even mentioned. This serious bias has refrained any further exploration into the promotion of free intellectual property and its feasible mode of business.

3.3. Lack Of Recognition, Promotion  And Protection Of Free Knowledge:

If the protection of copyright is regarded as the duty of a responsible government in protecting the private property of any entity in the society, it should be her divine mandate to protect the  intellectual properties in public domain for the whole society. She should record,  organize, host  and offer them freely to the public as a preservation of the valuable common legacy of human beings.¹⁴ Moreover, for awarding generous entities who contribute their works freely to the public without asking for a penny, the government should endorse their behaviour with some kind of assistance or recognition. To our best understanding, there is neither a provision in our legal framework for the prevention of privatization of intellectual property in public domain nor a legal recognition of the licence of free intellectual property, thus hindering the acceptance and application of free knowledge. We were told by the executives of some firms that they are forbidden to use freewares without additional service pledge or warranty from the creators or third party service providers according to their code of using software. It is deemed that the liability of using freeware including but not limited to the frivolous claim for copyright infringement is one of the major reasons. We do not understand why the government is so enthusiastic in protecting the profit of some wealthy money seekers even though they may not deserve if examined through strict authentication process but reluctant to promote and encourage the use of free intellectual properties such as providing a legal waiver for the users of freeware or setting up a registration system of free stuff for the recognition and protection of the donators.

3.4. Lack Of Clarity And Simplicity For Good Law:

If clarity and simplicity are two of the many qualities of good law as mentioned in the ABC of law theory, the current copyright ordinance is hard to meet the standard. Let alone the readability problem of legal jargon, we cannot find a clear, simple and unambiguous definition of "similarity", "passing off" or "essential portion" in the ordinance. We are not informed of the source to which we can resort for the most authoritative data base for validating the copyright status. We do not know what we are allowed to do with a genuine product such as a format shift conversion even though we duly pay the money. We do not know if we should trust the oral authorization of a customer requesting for the production of a product which is claimed to be owned or designed by him. Conclusively speaking, we do not know how to comply with the ordinance.

4. Conclusion:

In the end, we emphasize that we respect copyright and private ownership. Hence we quote and credit the source of free stuff, and pay for commercial products if we choose to use them. However, we object a bad law in the sense that law abiding people do not know how to observe it and evil minded people may abuse it.

We must ask the government and our lawmakers the final question about the ultimate purpose of technological progress. If the progress brings most of our people the ever graver problems of digital divide, polarization of wealth distribution, monopolization of knowledge, fear of frivolous lawsuit, limitation of freedom in our daily life, etc., how can we be convinced to embrace the digital revolution?        

We believe that technology is neutral. All the aforesaid adverse effects are the result of an imbalance of institution biased to some privileged minority. Some other people support it because they have been misled  or misinformed. We may find thousands reasons accounting for the irrelevance between wealth and contribution. The copyright law cannot fundamentally rectify the problem shortly but on the contrary may worsen the situation if it goes  extreme. What have been proved is that the copyright law has made a lot of pop singers and media tycoons be billionaires in the last century but leave a lot of great thinkers, artists and scientists in rather common or even humble living condition. Though they may not be rich in the enjoyment of material comfort, we can be sure that they are rich in their spiritual life and will be recognized by most people to be great persons in the history. 

We should apologize for lacking the knowledge and language power to pack our opinion with rhetoric and high sounding theories as the think tank of those wealthy tycoons. Yet we are sincere. We are suffering from the deficiency of the legal framework. We see the danger of the reform or revision of copyright law if it is continuously hijacked by the privileged minority and promises too much to many people of mediocre talent who intend to make a huge fortune with their mediocre work or performance. 

Remarks:

1. Seminar held by the “Internet Society Hong Kong (ISOC HK)” on 28/1/2010

2. Effective Demand:

3. GNU GPL:

4. Creative Common:

5. Origin of Copyright:

6. Exception and limitation of copyright:

7. Public good /non-rival good:

8. Freedom of Panorama:

9. Presumption of Innocense:

10. Prior Art Search:

11. Free Culture:

12. Permission Culture:

13. Say's Law:

14. Public Domain Intellectual Properties: